Greensill Capital Latin America head, Javier Villamizar, reveals how Telecoms companies are leading the way for investment in latin America

1. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 1
TELECOM
LATAMA driving force for
investments in
GREENSILL CAPITAL

2. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 2
Telecoms has become the mobile and digital vanguard of
economic development around the world. Latin America
is a particular case in point where developing robust lines
of digital communication has proven an essential tool to
rapidly enhance the competitiveness of nations, the flow of
information, economic growth, innovation and productivity.
With increased penetration from the mobile internet, the
availability of lighter and cheaper devices, as well as faster
connections and higher network capacity, those involved in
the sector are confronted with a rapidly shifting technology
landscape and one ripe for investment.
Lourdes Casanova, a senior lecturer with
the Emerging Markets Institute at Cornell
University, believes that we are entering the
third and most exciting phase of telecoms
evolution in Latin America. This process
started a quarter of a century ago with pri-
vatization, followed by the mobile revolution
from 2001 to 2009, with the current phase of
broadband expansion beginning in 2010. “The
main driver of growth in the Latin America
telecoms market has been the entrepreneur-
ial ecosystem that has sprung up across the
region,” says Casanova. “Through VCs, accel-
erators and with the participation of mobile
network operators and national agencies, the
opportunity to invest in this sector has never
been easier and never been more attractive.”
PRIVATIZATION MOBILE REVOLUTION
BROADBAND
EXPLOSION
1990 2000 2010
LATIN
AMERICAN
TELECOM
EVOLUTION

3. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 3
Figures from the Latin American Private
Equity Venture Capital Association (LAVCA)
show that VC investments surged from
$143m in 2011 to nearly $600m just four
years later.
Silicon Valley venture capital firms have been
investing in Latin America for more than a
decade and have, in many cases painfully,
learned valuable lessons on what works and
what does not. In the last few years, entrepre-
neurs in the region have shifted their focus
from trying to replicate e-commerce business
models that have been successful in other
geographies, to the development of inno-
vative ideas that solve global problems. This
paradigm shift has helped spur a new and
very important cycle of venture capital activity
across Latin America, allow-ing the venture
and entrepreneurial ecosystem to evolve not
only in Brazil, but also in Argentina, Mexico,
Chile, Colombia and in Miami, a city that for
many has become a key part of the region.
In parallel to the new approach from the
local entrepreneurs, a culture of innova-
tion has taken hold as government agen-
cies around the region like Pro-México,
Pro-Colombia, Buenos Aires Emprende, as
well as private sector initiatives like Endeavor
or Technoserve, have pro-moted new accel-
erators, programs, and co-working spaces
dedicated to entrepreneurs.
Today, as Colombia is entering a new phase
of economic growth thanks to the peace pro-
cess, Venezuela is submerged in turmoil and
Brazil is still coming to terms with a political
and economic crisis that has made global
headlines - its economy has shrunk by 7.4%
in the past two years - the tech sector across
the region continues on a growth spurt with
record levels of VC investment and deals.
So, where do those intimately involved with
the sector think the best opportunities for
investment lie?
For Javier Villamizar, Managing Director of
Greensill Capital, a leading global provider of
working capital solutions, the big investment
op-portunity can be found among compa-
nies that are able to offer operators in the
telecom sector solutions to operational or
financial issues and opportunities to create
new sources of revenue and to reduce costs.
He identifies challenges with payments,
financing and security, in particular, and
$143
$387
$425
$526
$594MILLION
2014
2015
2013
2012
2011
VENTURE
CAPITAL
INVESTMENT
SURGE

4. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 4
believes that companies that can create the
right solu-tions will be well worth supporting.
Villamizar has been working on develop-
ing financing solutions at Greensill Capital.
“Having faced the major working capital
issues of the mobile operators in Latin
America, we have developed and deployed
a few products that are particularly interest-
ing for them,” he says. “Supply Chain Finance
for example, allows carriers to extend pay-
ment terms all the way up to 270 days to
free up cash.” A simple idea that, thanks to a
cloud-based platform, can now be deployed
quickly, making it available to thousands of
suppliers of all sizes. Latin America-born start-
ups like Invoinet, GoSocket and TradeRocket
provide those platforms and have been able
to generate investor attention as Supply
Chain Finance flourishes in the region.
Another big opportunity lies on the consumer
side as increased smartphone penetration
in the region has given lower-income con-
sumers greater access to the internet, while
government initiatives have allowed telecom
carriers to get rid of subsidies and to provide
consumers with financing alternatives for the
purchase of increasingly expensive devices.
“As carriers get more and more into financ-
ing handsets to consumers, their cash posi-
tion deteriorates, because they have to pay
handsets suppliers in 30-60 days while
financing devices to consumers can take up
to 24 months. Greensill Capital has devised a
simple and cost-efficient solution that allows
carriers to sell those receivables, take them
off their balance sheet and get the cash
up-front,” says Villamizar.
Villamizar has a great deal of experience in
this field. Before joining Greensill, he was
president of Global Distribution at Brightstar
Corp, where he worked very closely with Latin
American entrepreneur Marcelo Claure to
transform the Miami-based company into
the world’s biggest mobile distributor.
“When I joined Brightstar it was already five
years old but had a very narrow focus on
LATAM,” he says. “My idea was to take our
product and service offerings that worked
in Latin America and make them a global
endeavour. This idea allowed us to raise hun-
dreds of millions of dol-lars in equity helped
us to transplant Brightstar’s supply chain
management model from Latin America to
emerging markets in Asia, the Middle East
and Africa.” In October 2013 Masayoshi Son’s
Softbank acquired Brightstar for more than
Day 0
Day 1
Day 90
Day 91
Day 180
Supplier issues invoice to Buyer payable in 180 days
Buyer approves
invoice in platformPlatform informs supplier of invoice approval
Supplier sells receivables to GC
GC pays supplier
Buyer pays GC
SUPPLIER
BUYER
GREENSILL SCF PLATFORM
SUPPLY CHAIN FINANCE OPENS OPPORTUNITY

5. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 5
84
79
77
62
58
43
62
65
87
0.9% 2.2% 1.9%
4.5%
3.2%
6.2%
4.0%
85
83
74
62
51
72
78
Europe
NorthAmerica
CommonwealthofIndependentStates
AsiaPacific
MiddleEast&NorthAfrica
Sub-SaharanAfrica
GlobalAverage
LatinAmericaandtheCaribbean
4.8%CAGR
Higher than any other region
except sub-Saharan Africa.
$2 billion, making early investors very happy
and turning founder, Marcelo Claure, into
a billionaire.
There is still mileage in this concept of taking
local ideas and making them a global play.
Villamizar believes it is worth backing ven-
tures founded by local entrepreneurs that
create products and services with global
appeal, or could easily be exported to similar
economies around the globe.
The GSMA Latin America Mobile Economy
report from 2016 points to a mobile ecosys-
tem in Latin America that is creating new
opportuni-ties for growth and innovation,
and a flourishing start-up environment.
The GSMA, which represents the interests of
nearly 800 mobile operators worldwide, is
forecasting over 100 million new subscribers
by 2020, up 25% from 2015, a dramatic hike.
Latin America is one of the fastest grow-
ing regions in this market. Overall regional
growth in unique subscribers will remain
strong out to 2020 as many countries
remain underpenetrated. This includes
some of the largest countries in the region
such as Brazil, Colombia, Mexico and Peru
– all of which will end 2020 around 80%
penetrated,” says the report.
“The CAGR of the mobile penetration in the
Latin America and Caribbean region will
amount to 4.8% by the end of the current
decade. The region will grow more quickly
in the next five years than any other region
except sub-Saharan Africa.”
The total number of Internet users in Latin
America is close to that of the United States,
but the Internet user base and broadband
growth over the past three to four years was
much higher in Latin America: close to eight-
times and 10-times the US rates, respectively.
These data suggest that the potential for
starting a company that provides inter-
net-based services in Latin America is huge.
414MILLION
Unique Subscribers
2015
BRAZIL
M
EXICO
ARGENTINA
CO
LO
M
B
IA
PERU
VENEZUELA
CHILE
ECUADOR
OTHERS
GUATEMALA
110MILLION
New Subscribers
to 2020
BRAZIL
M
EXICO
COLOMBIA
PERU
VEN
EZU
ELA
ECUADOR
OTHERS
CUBA
+25%
GROWTH
MOBILE
INTERNET BOOM
PENETRATION
SPIKE
414MILLION
Unique Subscribers
2015
BRAZIL
M
EXICO
ARGENTINA
CO
LO
M
B
IA
PERU
VENEZUELA
CHILE
ECUADOR
OTHERS
GUATEMALA
110MILLION
New Subscribers
to 2020
BRAZIL
M
EXICO
COLOMBIA
PERU
VEN
EZU
ELA
ECUADOR
OTHERS
CUBA
+25%
GROWTH

6. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 6
This is supported by figures published by the
Latin American Venture Capital Association
(LAVCA) which says that VC funding from
local and international investors drove ven-
ture deals in Latin America to a record high
in 2016 – increasing from 182 in 2015 to 197 in
2016 – a trend showing that more companies
had access to capital than ever before.
LAVCA’s figures for VC funding by country
shows that by far the largest number of
investments between 2011 and 2015 were
made in Brazil, followed by Mexico, together
accounting for over 70% of the total.
Tigre Wenrich, CEO of LAB Miami Ventures,
is an active angel investor and startup men-
tor. Over the past eight years he has helped
Open English, an online English language
education company, raise over $120 million
in venture capital funding. He also became a
mentor at NXTP Labs, one of the most active
early-stage funds for tech companies in Latin
America with operations in Argentina, Chile,
Colombia, Mexico and Uruguay. The firm has
invested in 174 companies in 15 countries
with just after five years in operation.
“There has been a big boom in investment
in LATAM telecoms companies, a trend that
is sure to continue over the next decade. The
cost of starting a technology business has
dramatically declined over the past ten years,
essentially as a result of open-source software
and cloud computing,” he says.
NXTP Lab’s aim is to “catalyze” innovative
Latin-American tech founders and help
them achieve their full potential by providing
capital, hands-on support and access to an
international community of like-minded
entrepreneurs, investors and mentors.
“Another factor is the way that social net-
works have enabled companies to acquire
more users with less capital. The availability of
global platforms for marketing, distribution,
and monetization also play a critical role,”
says Wenrich.
Faster, lower-cost online accessibility, com-
bined with the rise of Internet ubiquity
through the expansion of a variety of devices,
provides a new way of creating and validat-
ing a digital business without large amounts
of capital investment.
“Early-stage investors, while contributing far
less capital than traditional late-stage partic-
ipants, generate higher returns, because they
in-vest during the most significant, value-cre-
ating phase in a company’s lifecycle. NXTP
Labs is taking advantage of this innovative
way of in-vesting by making initial, small
capital bets as well as heavily investing with
entrepreneurial support. The combination
of cash investments and knowledge invest-
ments is crucial in this stage,” adds Wenrich.
BRAZILMEXICO
CO
LO
M
BIA
PERU
ARGENTINA
OTHERS
CHILE
BRAZIL
MEXICO
CO
LO
M
BIA
PERU
ARGENTINA
O
TH
ERS
CHILE
Investments
by amount
2011–2015
Investments
by # of Funds
2011–2015
70%of investments
in Brazil or Mexico
MORE
VENTURE
CAPITAL
FUNDING
BRAZIL
MEXICO
CO
LO
M
BIA
PERU
ARGENTINA
OTHERS
CHILE
BRAZIL
MEXICO
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LO
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BIA
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ARGENTINA
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TH
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CHILE
Investments
by amount
2011–2015
Investments
by # of Funds
2011–2015
70%of investments
in Brazil or Mexico

7. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 7
One sector growing very quickly in the region
is Fintech, especially in Brazil and Mexico.
Finnovista, a Fintech start-up accelerator,
believes that a few of these startups could
take up to 30% of Mexico’s banking market
in the next decade, with retail banks and
payment services be-coming particularly
vulnerable. More than half of the more than
160 Fintech companies in México are focused
on payments, remittances and lending.
“Nothing tells the story of how the tech eco-
system is steaming ahead in Latin America
quite like the rise of Mexican Fintech,” says
Techcrunch editor at large Mike Butcher. He
believes that the financial services space ticks
all the right boxes that entrepreneurs look
for when launching a company: hard to solve
problems, meaningful impact, transforma-
tional technologies, clear business models
and a solid financing environment.
“Mexico’s Fintech industry has everything VCs
dream about: large untapped markets, highly
scalable models, startups with solid traction,
successful references around the world and
multiple exit scenarios,” says Butcher.
Wenrich agrees that Mexico is an ideal
market to launch a Fintech startup in Latin
America - and has made investments in
this market himself. His fund is invested
in a cloud-based lending platform called
Quotanda, which focuses on allowing schools
to offer flexible, afforda-ble financing pro-
grams for their students. “Its mission is to
democratize access to education by improv-
ing financing options,” says Wenrich. He cites
it as a business where experienced founders
have brought a wealth of knowledge on the
business, product and technical sides.
Butcher believes that the financial ser-
vices industry is diverse, competitive and
ever-changing - and it beats in time to the
lightning-fast speed of technology. Angel
investors, family offices and VCs have been
keen to meet the founders of start-ups in
this space and they are ea-ger and willing
to invest more and faster. “I’d say that if you
are preparing to start your first or next com-
pany, Mexico’s and in general, Latin America’s
Fintech opportunity is worth a long look. It
may be your best shot at building the next
great startup.”

8. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 8
CASE STUDY
GRAPHPATH

9. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 9CASE STUDY: GRAPHPATH
SIMPLIFICATION
GraphPath simplifies the adoption of graph computing, business intelligence and machine
learning technologies across enterprises that are looking to quickly expand their ability to
extract strategic value from large and complex datasets.
BIG VISUALS
The GraphPath solution allows companies to semantically organize all of their raw data,
which may currently be inefficiently distributed across different data silos throughout their
organization, into a single ontology that facilitates searching and analyzing their knowledge, as
well as, deploying automated machine learning workflows, all in a collaborative and visually-
engaging manner.
APPLIED DATA
It could be applied to the data from cell towers and the data generated by the system when
phones connect to it.
From the users’ perspective, it may include their billing history, app usage, call log, roaming
charges, and more.
And lastly, it may also include sentiment data collected from social media networks that
is generated around geo-fenced areas, such as a high-value cell tower clusters around the
downtown area of a city, to compare against the network data and the user data.
That means you could get a list of cell towers in a region with the highest percentage of drop
calls where the user sentiment is 20% worse than competitors, for instance.
GraphPath is the first
Knowledge Graph-as-a-service
that allows organizations
to evolve from Big Data to
Big Knowledge through the
creation and management
of large-scale enterprise
knowledge graphs.

10. TELECOM: A DRIVING FORCE FOR INVESTMENTS IN LATAM 10
3 FUNDAMENTALS
OF FUNDING STRATEGIES
FOR STARTUPS
As an alternative to angels
or VCs, startups should
look at alternative ways of
financing such as Supply
Chain Finance programs
used by carriers.
Explore long dated
contracts that could
be monetized as an
alternative to raise
more equity.
To attract VC funding,
develop solutions
with global appeal
that could be easily
transported to
other geographies.
To learn more about working capital solutions with specialist application to the
Telecoms sector and Latin America please contact javier.villamizar@greensill.com GREENSILL CAPITAL